Teachers Union Sues Trump Administration Over Student Loan Repayment Freeze

WASHINGTON, D.C. — The American Federation of Teachers (AFT) filed a lawsuit against the U.S. Department of Education on March 12, 2025, alleging that the Trump administration’s recent actions have unlawfully shut down access to income-driven repayment plans, affecting millions of student loan borrowers.

In the lawsuit submitted to the district court, AFT contends that the Department’s decision to halt the application process for all Income-Driven Repayment (IDR) plans violates federal law. “By effectively freezing the nation’s student loan system, the new administration seems intent on making life harder for working people, including for millions of borrowers who have taken on student debt so they can go to college,” said AFT President Randi Weingarten in a statement.

The complaint comes amid significant turmoil in the federal student loan system, which has left many borrowers in a state of uncertainty. AFT points out that more than 12 million Americans rely on IDR plans to make their loan payments manageable and plan for eventual forgiveness of their student debts.

According to experts, the IDR plans are crucial for borrowers, limiting monthly payments to a percentage of discretionary income and canceling any remaining debt after 20 to 25 years. As of September 2024, over 12 million individuals were enrolled in these programs, as highlighted by higher education expert Mark Kantrowitz.

Though the Department of Education cites a recent injunction from the 8th Circuit Court of Appeals regarding Biden’s Saving on a Valuable Education (SAVE) plan as the reason for ceasing IDR applications, AFT argues that this ruling should not have affected the ongoing processing of other IDR plans, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR).

“The freezing of these programs fails to recognize that these plans, unlike the blocked SAVE plan, are not under legal challenge,” Mike Pierce, executive director of the Student Borrower Protection Center, said. He added that many borrowers are struggling to keep up with rising payments while navigating the fallout from federal inaction.

During these unprecedented times, the AFT maintains that the Department of Education’s interpretation of the court’s ruling is overly broad and detrimental. Many borrowers have found themselves unable to apply for new IDR plans or make necessary adjustments to their current repayment schedules. Without available recovery options, borrowers risk falling into default.

The lawsuit arrives at a time when the burdensome federal student loan debt remains a contentious issue in the U.S., with approximately 43 million federal student loan borrowers collectively owing about $1.62 trillion. AFT has asserted that the Department of Education is obligated under federal law to provide these programs, and their unauthorized suspension is harming borrowers.

In statements made to the media, the Education Department acknowledged the ongoing process to realign the repayment programs with judicial rulings, expressing hope that a revised application allowing borrowers to choose their repayment plans would be available soon. However, AFT claims that the Department has not effectively communicated when access to these programs would return.

As the legal battle unfolds, the outcome may significantly impact student loan borrowers across the nation, with millions watching closely to see how the courts will respond to this latest challenge regarding their financial futures.